Telangana HC upholds Arrest by GST Officials [Read Judgment]

CBI - GST Evasion - Arrest - Taxscan

The Telangana High Court has reportedly dismissed a petition seeking a direction to the Hyderabad GST Commissionerate officials not to arrest them and set aside summons issued.

The Writ Petition was filed by Seven Companies i.e., Infinity Metals Products India Limited, Sujana Universal Industries Limited, Hindustan Ispat Private Limited, EBC Bearings India Limited, V.S. Ferros Enterprises Private Limited, Hyderabad Steels, MSR India Limited andSuyati Impex Private Limited.

The Petitioners challenged the summons issued by the Hyderabad GST officials and the searches conducted by the latter at their respective offices.

While upholding the arrest, a Division Bench comprising of Justice V. Ramasubramanian and Justice P. Keshava Rao rejected the technical objections raised by the petitioners over the powers and reasons of the GST officials to arrest them.

The bench observed that despite the petitions being maintainable and incongruities within some provisions of the Central Goods and Service Tax (CGST) Act-2017, the relief could not be granted to the companies due to the ‘special circumstances’ of the case.

The counsels for the petitioners said the maximum punishment under Section 132 of the CGST Act was five years apart from fine. They contended that under sections 41 and 41A of the Criminal Procedure Code a person cannot be arrested as long as he or she complies with the notice for appearance.

The GST regime is at its nascent stage. The law is yet to reach its second anniversary. “The complaints against the petitioners constitute a threat to the very implementation of law within a short duration of its inception,” the bench observed.

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